The 12-Month Plan for Business Owners Who Want to Buy a Home
The business owners who close smoothly are the ones who called me a year before they wanted to move. Not because the loan takes a year. Because the year before the loan is when the file gets built, and a clean file is the difference between a smooth closing and a stressful one.
I am a mortgage broker in Oregon City and I run three businesses myself. Here is the plan, month by month.
Months twelve through ten: the conversation
Call me. Twenty minutes. I look at your last two years of returns and tell you roughly where you stand and what the biggest issue is. For most business owners it is one of three things: income that looks low on paper, business and personal money mixed together, or a credit file with a few scars from the lean years.
Then we get your CPA on a call. Your CPA minimizes your tax. I get you a house. Those goals fight each other, and the only fix is deciding together which deductions matter more than the mortgage this year.
Months nine through seven: clean the books
Separate business and personal accounts completely if they are not already. Pay yourself in a regular, documented way. Stop running personal expenses through the business, and stop running business expenses through your personal card. A lender reads bank statements, and every oddity is a question you will have to answer in writing later.
If you have been paying yourself irregularly, start a pattern now. A lender likes to see the same thing happening every month.
Months six through four: credit and debt
Pull all three credit reports. Fix errors. Pay down revolving balances so your utilization is low. Do not open new accounts. Do not close old ones. Do not co-sign for anyone. If a business loan or line is in your personal name, we talk about whether it can be moved or documented so it does not count against you.
Months three and two: documents and the tax year
If the tax year ends in this window, this is the moment the CPA conversation pays off. The return that gets filed now is the one the lender will read. If the plan was to take fewer deductions this year, this is when that plan becomes real.
Gather everything: two years of personal and business returns with all schedules, year to date profit and loss, recent business and personal bank statements, a list of your business debts.
Month one: pre-approval
I run the file. You get a real pre-approval based on documented income, not a guess. You shop with confidence, and when you find the house, the hard part of the loan is already done.
The five rules that cover most of it
- Clean, separate books.
- A CPA meeting about which write-offs to keep.
- Separate accounts and a regular paycheck to yourself.
- No mystery deposits and no mystery withdrawals.
- Steady credit. No new accounts, no closed accounts, no co-signing.
None of it is hard. All of it is easier with a year of runway.
If you do not have a year
Call me anyway. Some of this can be compressed, and some of it only takes a conversation to find out it was never a problem. I would rather you hear the real timeline from me than guess at it.
I serve Oregon City, Clackamas County, Multnomah County, Washington County and the rest of Oregon. Message me and we will build your twelve month plan together.
Becky Chambers, Mortgage Broker, NMLS #2814018. Freestone Mortgage, NMLS #2613454. Licensed in Oregon. Equal Housing Opportunity. For informational purposes only. This is not a commitment to lend. Verify tax questions with a licensed tax advisor.